Local authorities invest £16bn in fossil fuel companies. In Southwark, we will no longer do this – writes Cllr Fiona Colley, Chair of Southwark’s pension fund

Data released on 9 November shows that the UK’s local authorities invest more than £16bn into companies that extract oil, gas and coal. Collectively, the country’s local government pension funds have nearly £3,000 invested in fossil fuels for every pension fund member. Southwark has decided we will no longer do this.

In December 2016, Southwark council pension fund made a landmark commitment. Following more than a year of consultation, deliberation and work with community groups we announced a decision to divest the £1.2bn fund from fossil fuels.

This was a decision based not just on our political and ethical concerns, but primarily on our belief that climate change and significant investments in fossil fuels present a long term financial risk to our fund. We are clear that our action to reduce the carbon exposure of our fund is wholly consistent with our fiduciary duties as pension fund trustees. This move was not taken lightly, but we believe it is the right way forward. By backing divestment, councils can show leadership on climate change, protect public sector workers from long-term financial risk and seize the opportunity to invest in sustainable communities and the transition to a low carbon economy. Continue reading “Why the council pension fund I chair is divesting £1.2bn out of fossil fuels”

Our prominent and successful fringe event at the Liberal Democrats Autumn Conference in Bournemouth this September was met with great support.

We were the only fringe to put fossil fuel divestment on the agenda and with a room packed of full keen Lib Dem members and councillors, we were excited to be there.

It was clear that the traction we have been building with lib dem members and councillors is picking up pace. There was no doubt in the room that we face a fossil free future; coal power stations are closing and solar and wind will power much of our lives. There was no doubt from our speakers that in the grid needs to be repurposed for the 21st century.

With our local government pension funds heavily invested in fossil fuels, like fracking, tar sands and coal – these investments will soon become stranded assets. There was clear collective understanding of the need to divest and for Liberal Democrats to be a powerful voice in this fight against climate change. Divesting our pension funds will free up capital to reinvest into renewable energy, community energy and building the just transition.

The speakers and audience were in agreement that we do not have to wait for central government to drag their feet on climate action, we can start taking action locally now.

“Oil companies have walked away with billions in profits from drilling – and now they’re lobbying to leave their junk in the North Sea. The Ospar Convention for protecting the North Sea was developed through years of negotiations and compromise. Ed Davey seems happy to ditch these basic regulations, dismantle the ‘polluter pays’ principle and give oil corporations more.”

She continued,

“Decommissioning will be a new global industry, and Britain could take a lead – creating thousands of jobs and bringing life into quiet dockyards. Stronger environmental regulations can lead to a stronger economy.

Effectively Davey is calling for a giveaway of tens of billions of pounds to BP and Shell, in return for a few social responibility projects. This sounds like greenwash.”

Many of the councils most devastated by the winter floods are amongst the largest investors into fossil fuels.

Storms Desmond, Eva and Frank battered communities across Scotland, Wales and the North of England throughout December, destroying homes, infrastructure and lives. Council workers and public sector officials were on the frontlines, trying to stop the floods and cleaning up the damage afterwards.

Public sector workers in Manchester, York and elsewhere are now discovering that their pensions are accelerating climate change – as they have been invested heavily into fossil fuels.

Greater Manchester Pension Fund tops the list, with over £1 billion of council workers’ pensions invested into companies like BP and Shell – almost 10% of the total.

York – where thousands had to evacuate after flood gates were opened – holds 7.2% of council workers pensions’ in fossil fuels with coal mining company Rio Tinto the largest holding.

South Ayrshire – where 12 people were dramatically rescued by a helicopter after their bus was swept aside and stranded by floodwaters – participates in the Strathclyde Pension Fund, with over £750 million in fossil fuels.

Over £670 million of West Yorkshire’s pot – which covers pensions for public employees from flooded Leeds – is in oil, gas and coal.

Cumbria was hardest hit by Storm Desmond in early December, with thousands rescued by lifeboats and causing at least one death. Green Party leader Natalie Bennett called on Cumbria County Council to “reconsider the call from fossil fuel divestment campaigns to take the £108 million it had invested in 2013/14 in fossil fuels into investments that tackle climate change, rather than exacerbate it.”

Data collated by Platform, Community Reinvest, 350.org and Friends of the Earth shows that across the UK, local council pension funds have invested over £14 billion in fossil fuels – more than £3,000 per public sector employee. This is more than double the total clean-up costs from December’s floods, estimated at almost £6 billion.

This is absurd. Further, these investments funnel capital out of local lives and economies across the UK. Instead of creating local jobs, this wealth is siphoned to large multinationals, who use it to drill and pollute abroad. This is neoliberalism extracting wealth from Britain’s regions- almost £500 per resident of Manchester.

Finance directors and pension board members have for years hidden behind vague fiduciary duty requirements – claiming that this forces them to invest for short-term profit. However, legal opinion is increasingly shifting. In October, the Environment Agency Pension Fund announced it was divesting 90% of its coal holdings and 50% of oil & gas. It argued that ignoring the risks posed by climate change would be a breach of the fund’s legal duty to act in the best, long-term interests of its members.

The recent floods show that pension funds that invest in fossil fuels are not acting in either the long-term or the short-term interests of their members.

Naomi Klein and Jeremy Corbyn joined forces for a #JezWeKlein event during the Paris climate talks. Organised by Trade Unions for Energy Democracy, “Now is not the time for small steps: Solutions to the Climate Crisis and the role of Trade Unions” addressed energy democracy, climate jobs, and the need for a transition that is not only just, but also transformative.

Naomi urged unions and their allies not to accept a “highly dangerous” deal, and to take to the streets in Paris on December 12.

Jeremy pointed to the need to democratise energy, and that the failure to address climate has contributed to devastating flooding throughout Northern England, Scotland and Wales

“We’ve taken the responsibility on ourselves to do something here and now – to stop the destruction of the world’s environment, to bring people together to prevent that happening, and above all, to bring people together not through fear, but through hope, through imagination, through optimism,” Corbyn said. “Unleash the optimism, unleash the imagination, unleash the hope. That is the way forward.”